Corporate Bond Borrowers Are a No-Show on First Trading Day of Year

(Bloomberg) -- After the slowest December in 23 years, U.S. corporate bond issuers will wait at least another day before tapping debt markets.

Investment-grade borrowers broke with precedent from the last two years and won’t sell bonds to start the new year. They issued $7.4 billion last year and $20 billion in 2017.

Corporate Bond Borrowers Are a No-Show on First Trading Day of Year

The higher cost for borrowers and volatile global markets may be what’s sidelining issuers. High-grade credit spreads ended Monday at the highest since July 2016.

Companies borrowed less than $8 billion of investment-grade debt in December, the least since 1995. There were no bonds issued in the high-yield market last month.

The weak start to the year isn’t too unusual. In 2016, no company sold high-grade bonds on the first trading day following the holiday. But the next day almost $26 billion priced. Issuers waited two sessions in 2015 before selling $13 billion of debt.

©2019 Bloomberg L.P.